Contents: Page 01: Valley First at a Glance Page 02: 2009 Financial Highlights Page 03: In Memoriam Page 04: Message from the Chair Page 06: Board of Directors Page 08: Message from the Acting CEO Page 10: Senior Executives Page 11: About Us Page 12: Serving our Members and Clients Page 16: Supporting our Communities Page 18: Putting our People First Page 20: Consolidated Financial Statements Valley First at a Glance Corporate Profile On Jan. 1, 2010, Valley First merged with Langley-based Envision Financial to form First West Credit Union. Following the merger, Valley First continues to operate under its own identity as a division of First West. Before the merger, Valley First had grown to become the eighth largest credit union in British Columbia with 16 branches and nine insurance offices throughout the Okanagan, Similkameen and Thompson valleys. During 2009, these locations were staffed by 450 employees, served more than 47,000 members and managed nearly $1.8 billion in assets under administration. Subsidiaries also operating under the Valley First name include Valley First Insurance Services Ltd. and Valley First Financial Services Ltd. Our Vision: To be valued as the best financial services provider. Our Purpose: We are a trusted advisor to our members and clients, providing financial solutions that add value to their lives and the communities we serve. Core Values: • Honesty, fairness, integrity and ethical business practice • Corporate citizenship with community responsibility • Respect and opportunity for individual growth and the development of our people • Continuously seek new opportunities to serve • The pursuit of excellence in everything we do • Strength and stability of capital Products and Services Personal banking: savings and chequing accounts, high-interest savings accounts, US dollar accounts, special accounts for seniors, youth and junior members, online, telephone and mobile banking, personal loans, lines of credit, mortgages, MasterCard credit cards, safe deposit boxes, foreign currency, term deposits, TFSAs, traveller’s cheques. Commercial banking: business savings and chequing account packages, cash management services, lines of credit, letters of credit, business and commercial loans, real estate, construction and development financing, business credit cards, payroll outsourcing, merchant MasterCard and foreign exchange services, night deposits. Wealth management: term deposits, TFSAs, RRSPs, RESPs, LIFs, RRIFs, GICs, annuities and segregated funds, stocks, bonds, mutual funds. Insurance: home and property, business, automobile, motorcycle, recreational, life and health. 2009 Annual Report : : 1 2009 Financial Highlights Total Deposits Total Loans Under Administration Operating Income 1,400,000,000 1,400,000,000 12,000,000 1,200,000,000 1,200,000,000 11,000,000 1,000,000,000 1,000,000,000 10,000,000 800,000,000 800,000,000 9,000,000 600,000,000 600,000,000 8,000,000 400,000,000 400,000,000 7,000,000 200,000,000 200,000,000 6,000,000 5,000,000 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 4,000,000 Total Assets Under Administration 3,000,000 Total Deposits and Investments Under Administration 1,800,000,000 2,000,000 1,600,000,000 1,600,000,000 1,000,000 1,400,000,000 1,400,000,000 1,200,000,000 1,200,000,000 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 1,000,000,000 1,000,000,000 800,000,000 800,000,000 600,000,000 600,000,000 400,000,000 400,000,000 200,000,000 200,000,000 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 2 : : 2009 Annual Report In Memoriam Harley Biddlecombe, Valley First President and CEO Harley Biddlecombe served as Valley First’s president and chief executive officer for 31 years. When Harley joined Valley First in 1978, the credit union had two branches, 25 employees and 10,000 members. Under his leadership, the credit union expanded across the Okanagan, Similkameen and Thompson valleys, growing to include 16 branches, nine insurance offices, more than 450 employees and nearly 50,000 members. Most recently, Harley led Valley First through the ground-breaking merger with Envision Financial that created First West Credit Union. Establishing First West was a passion for Harley; he felt strongly about creating a bold, new model to further strengthen the credit union system. Despite leading such remarkable growth, Harley always ensured Valley First remembered and preserved what continues to be the heart of the credit union system – the strong relationships between employees, members and the community. In this regard, Harley always led from the front. He was an active and passionate community member, lending his voice and support to numerous charities and those less fortunate. He was also a devoted family man, proud of his three children and six grandchildren and a loving husband to his first wife, Barbara and, after her passing, his second wife, Vickie. Harley passed away on Oct. 4, 2009. While no longer with us, he remains an inspiration to those who had the pleasure of working with him. His legacy will live on at Valley First and throughout the credit union system. Harold Hoey, Founding Member, Valley First Credit Union Harold Hoey moved to Penticton in 1946 after serving in the Royal Canadian Air Force during the Second World War. A year later, as a member of the local Knights of Pythias lodge, he became a founding member of the Penticton and District Credit Union (later renamed Valley First). Harold could recall the early days of the credit union and the series of events that brought it into being, including connecting lodge members with local letter carriers to bolster membership numbers. Although Harold at times expressed reservations about Valley First’s growth, he was impressed that as the organization grew employees retained their friendliness and member-focus. A Valley First member for 62 years, Harold spoke fondly of the staff at the Penticton Main branch and enjoyed the fact everyone knew him by name. Harold passed away on Aug. 4, 2009. 2009 Annual Report : : 3 Chair’s Message Since it was established in 1947, Valley First has been known for innovation, growth and member service. Despite a challenging year that had other financial institutions questioning their futures, Valley First remained true to its roots in 2009 by pushing ahead with its growth strategy and strengthening relationships with its members. As noted in the acting chief executive officer’s message, Valley First recorded another year of strong financial performance. That success was never certain, however, given the difficult economy. Valley First’s management had to make a number of tough decisions to ensure the credit union maintained acceptable financial margins. I applaud them for their business acumen and dedication to ensuring the credit union’s continued success. Much of the focus for Valley First’s board of directors in 2009 was on the merger with Langley-based Envision Financial to form First West Credit Union. The board devoted considerable time to working with the regulator to gain approval for the merger, then explaining the merger to credit union members in preparation for an approval vote in September. We saw Envision, which has 120,000 members and more than 800 employees, as a good partner with whom we could grow. We also saw the unique aspects of the merger – most importantly the ability to continue operating under the Valley First identity, to continue making decisions locally and to continue supporting our communities – as strong and compelling grounds for support. Members agreed. Valley First’s Class A, B, and C shareholders voted in favour by a resounding 88.4, 88.6 and 80.1 per cent, respectively, easily meeting the requirement for two-thirds of members casting ballots in each share class to vote positively. Envision’s members also voted strongly in favour. The support was heartening, and I would like to thank our members once again. The board’s work on the merger did not end with the positive vote, however. We continued to work in the final months of 2009 to develop a set of governance policies and structures to ensure an orderly transition took place when the merger became final on Jan. 1, 2010. We also prepared to become part of the much larger First West board. First West was conceived as a merger of equals, and after a short transition period, the board will consist of equal numbers of directors from the Valley First and Envision regions. This offers Valley First’s members the assurance that their voices and priorities will continue to be represented at the board table in years to come. Working with Envision and First Calgary Savings, an Alberta credit union that has partnered with Envision for several years and remains a partner with First West, Valley First’s board also took part in a process to select a new, permanent chief executive officer for First West. Launi Skinner, the new First West CEO, was appointed in early 2010. In addition to preparing for and executing the merger, Valley First’s board carried out its normal responsibilities, working with management to assess and respond to changes in the general operating environment, to evaluate economic challenges and enterprise risk and to review and approve business goals and detailed financial budgets. We continued to review our corporate governance standards and practices for individual directors, board structure and board processes to ensure we met member, public and regulatory expectations. The board also continued to oversee the credit union’s democratic processes. Three directors’ terms – including mine – expire at our annual general meeting in June.